Greece to start talks now with partners on funding gap: finance ministry official
ATHENS (Reuters) - Greece expects to start discussions immediately with its EU/IMF partners on filling the state's funding gap, a finance ministry official said on Tuesday.
Euro zone finance ministers agreed on Tuesday to a four-month extension of Greece's EU/IMF bailout program but funding will be released only after the new leftist-led government's economic plans have been approved in detail.
"The discussions on Greece's funding gap will begin tonight, tomorrow morning," said the official, who was speaking on condition of anonymity.
Following interest payments this month of about 2 billion euros ($2.3 billion) to private bondholders and official lenders, Greece must repay an International Monetary Fund loan of around 1.6 billion that matures in March. Then it needs 0.8 billion euros for interest payments in April and about 7.5 billion in July and August for maturing bonds held by the European Central Bank and for more interest payments.
Options include raising the limit set under the bailout program on Greece's issuance of short-term T-bills, and using 1.9 billion euros in profits that the ECB has made on its holdings of Greek government bonds, the official said.
Greece cannot have more than about 15 billion euros of outstanding T-bills but had said it wanted to raise that limit as a temporary measure.
Athens has been frozen out of international capital markets since it was bailed out in 2010, apart from two bond issues made last year made under a previous conservative-led government.
The official said Greece could return to commercial medium and long term borrowing only after three factors were fulfilled:
- Restructuring its debt, which was an estimated 175 percent of annual gross domestic product at the end of last year.
- Reducing the target for its primary budget surplus, before debt payments. For this year, it was set at 3 percent of GDP under the bailout program, although the deal with the Eurogroup opens the possibility for agreeing a lower figure.
- Greece also needed a loan package from the European Investment Bank, an EU development bank.
Under the Eurogroup agreement, the government of radical Prime Minister Alexis Tsipras promised not to reverse privatizations that have been completed, or halt those that are underway.
The official confirmed that Greece would not reverse the privatization of betting firm OPAP <OPAr.AT>.
($1 = 0.8847 euros)
(Reporting by Lefteris Papadimas, Renee Maltezou and Karolina Tagaris; Writing by David Stamp; Editing by Ruth Pitchford)
